Changes in the Structure of Employment in India Yoshifumi Usami and Vikas Rawal

Slow growth of employment has been a remarkable feature of economic change in India during the post-liberalisation period. Economic growth over this period has been highly uneven across different sectors and regions. The rate of growth of agriculture and manufacturing sectors has been sluggish for most part of the postliberalisation period. Growth, even in periods during which it increased, was driven primarily by the service sector. It has been primarily located in urban, particularly metropolitan, areas. Trade and foreign investment have played only a marginal role as drivers of economic expansion. Benefits of economic growth have accrued differently across classes, resulting in a sharp increase in economic inequalities.

Not only has the average employment growth over this period has been low, the uneven pattern of growth has resulted in considerable changes in the structure of employment. There has been a considerable contraction in generation of employment in agriculture since the second half of 2000s. The Mahatma Gandhi National Rural Employment Guarantee Act Programme (MGNREGA) was introduced in the mid-2000s with a promise of providing a guarantee of 100 days of employment to each rural household. Although that promise has never been met, the programme resulted in some increase in availability of employment in rural areas particularly in the initial years of its implementation. On the other hand, an increase in schooling attendance rates among children, albeit slow, is also said to have resulted in withdrawal of a section of younger people from the labour force.

A number of recent scholarly studies have analysed the changes in levels of employment. Mehrotra et. al. (2014) provided a broad overview of changes in employment since 1993–2004. They examined employment trends in the Indian economy as a whole and showed that employment in agriculture decreased while employment in non-agricultural activities increased. They have argued that the decline in work participation rates of women was primarily a result of their increased participation in schooling. Rangarajan, Seema and Vibeesh (2012) also explained the decline in work participation rates of women after 2004–05 on the basis of the rise in school enrolment. Mehrotra et. al. (2014) claimed that withdrawal of adult women from the labour force was also a result of higher school attendance rates among girls and increased out-migration of adult men, which made housework more time-demanding for adult women. Abraham (2013) has maintained that, while agrarian distress forced more women into work between 1999–2000 and 2004–05, better economic conditions in a patriarchal society created social pressures that withdrew them from the labour force and confined them to doing housework. Rawal and Saha (2015) have argued that the long-term decline in women’s workforce participation rate was a result of contraction of employment in agriculture and lack of corresponding rise in employment opportunities in rural non-farm sector. They contend that more concentrated land coupled with labourdisplacing machines led to the drop in labour absorption in agriculture. On the other hand, lack of access to basic amenities and serious problems of safety for women impede their physical mobility, limiting migration of rural women to the urban labour markets.

This paper presents an analysis of overall trends in the structure of employment, differentiating these trends between men and women, between rural and urban workers, and across different sectors. The emphasis of this paper is on using age-cohort analysis to elucidate the dynamics of change in the employment structure.

An age-cohort-wise analysis of employment is limited by the fact that data related to age in NSSO surveys and censuses, particularly for older people, are not accurate. This, in particular, limits the possibility of using age-cohort analysis to examine long-term dynamics of changes in employment structure. In view of this limitation, the focus of the age-cohort analyses in this paper is on the 61 rounds of NSS Employment Unemployment Surveys (hereinafter, EUS), which are combined with age-cohort population data from the 2001 and 2011 Censuses. In
addition, because of better reliability of age data, the analysis primarily focuses on the changes in levels of educational attainment and the structure of employment among the youth.

Section 1 of this paper presents an overview of the changes in the overall size of the labour force and in work participation rates between 1993–94 and 2011–12.

Section 2 explains the changes in employment structure across different industries.

Section 3 presents the results of age cohort analyses.

Section 4 presents discussion of the impact of improvement in educational attainment on employment conditions of young workers.

The paper concludes with a summary of the main findings.

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